Alberta Business Registration (6 Step Detailed Guide)

Setting up a business in Alberta necessitates meticulous planning and foresight. This guide will lead you through the six crucial steps to establish and oversee a business in Alberta, whether you opt for a sole proprietorship or delve into the complexities of incorporating a company. This comprehensive outline strives to provide you with the essential knowledge and understanding to make informed choices, paving the way for your business to thrive.

Step 1 - Do You Need to Register Your Business?

All businesses located in Alberta, except for sole-proprietorships operating under the individual's name, must register with the Alberta business registry. A sole-proprietorship can operate under the proprietor's own name without registering; however, it may have to be registered with local authorities to obtain a business license to operate in a specific municipality. Note, this is separate from the extra-provincial registration requirement for businesses located outside of Alberta that do business in Alberta.

Step 2 - Choose the Right Alberta Business Structure

The two most common business structures in Alberta are sole proprietorship and corporation. Other less common structures such as partnerships will not be the focus of this article.

Different Business Structures in Alberta

Corporation (Alberta)

Description. A legally separate business owned by shareholders. Governed by the Business Corporations Act (Alberta). Can be completely owned and operated by foreigners.
One-time government fee: $275 + ~$100 Service Fee¹
One-time name fee: ~$50
Annual government fee: $50 + ~$25 Service Fee^1
1 Government fee indicated with typical provider surcharge indicated in brackets

Corporation (Federal)

Description. Similar to a Alberta Corporation but governed by the Federal district. 25% resident Canadian requirement.
One-time government fee: $200
One-time name fee: $13.80
Annual government fee: $12

Sole Proprietorship

Description. A sole proprietorship is a business structure in which a single individual owns and operates the business, making them personally responsible for its profits, losses, and liabilities.
One-time name registration fee: $10 + ~$50 Service Fee^1
1 Government fee indicated with typical provider surcharge indicated in brackets

Pros and Cons of Different Business Structures

Business Type	Setup Fees	Pros	Cons
Corporation	$$$	Legal shield, easier to invest in, potential tax benefits	More complex, more expensive to set up and maintain
Sole Proprietorship	$	Simple structure & reporting	No legal separation between the individual and the business
Partnership	$	Can share costs between individuals	No legal shield, decisions require consensus between partners

Illustrative Costs Associated With Each Business Structure

	Corporation	Sole Proprietorship
One-time Government Name Search or Reservation Fee	Federal - $13.80 Alberta - ~$50	$30
One-time Government Fee	Federal - $200 Alberta - $275 + ~$100 Service Fee	$40
Annual Government Fee	Federal - $12 Alberta - $50 + ~$25 Service Fee	N/A
One-time Extra-Provincial Name Registration Fee	Federal - $50 + ~$25 Service Fee Alberta - N/A	N/A
One-time Extra-Provincial Registration Fee	Federal - $275 + ~$100 Service Fee Alberta - N/A	N/A
Annual Extra-Provincial Registration Fee	Federal - $50 + ~$25 Service Fee Alberta - N/A	N/A
Legal	$1500+ for lawyer to form company + $500+/year	$0+
Accounting	$1500+ for tax return preparation	$500+ for tax return preparation
Accounting Software	$0 to $700/year	$0 to $700/year
Payroll Software	$25/month + $4/employee	$25/month + $4/employee

Disclaimer. This are ballpark numbers to give a sense, situation and requirements will dictate

Step 3a - Register a Sole Proprietorship in Alberta

Registering as a Sole Proprietorship in Alberta is straightforward.

Steps to register a Sole Proprietorship:

1. Search for name conflicts (Optional). Check for name conflicts for your proposed name using a NUANS search (Approximate cost $50) and the Canadian Trademarks Database.

2. Reserve your name & register business Reserve a business name at a ~$60 ($10 government fee + ~$50 Service Fee) cost using a registered Alberta business registry agent. There is no additional registration requirements beyond reserving a "Trade Name" and associating it with yourself as an individual.

Step 3b - Incorporate in Alberta

Businesses can be incorporated in Alberta as either a Federal Corporation or an Alberta Corporation. There are some relatively minor differences but importantly both can sell across Canada and across the globe.

Federal Corporation with Alberta Extra-Provincial Registration

A common choice for corporations in Alberta is a Federal Corporation with an Alberta Extra-Provincial Registration.

Extra-Provincial Registration

Extra-provincial registration in Canada refers to the process of a business entity obtaining permission to operate in a province or territory other than the one in which it was initially incorporated. Federal corporations typically must be extra-provincially registered at least in the province which they are headquartered in.

Steps to Incorporate a Federal Corporation with an Alberta Extra-Provincial Registration:

1. NUANS Name Search. Conduct a NUANS name search through the Corporations Canada portal. Cost is $13.80 and is completed almost immediately.
2. Incorporate with Corporations Canada. Through the online portal, the same one you used for the NUANS Name Search, incorporate your business and pay a $200 fee. Corporations Canada provides recommended text you can use for items such as share classes, restrictions on share transfers, etc. Through the process you are required to sign the Articles of Incorporation and Initial Registered Office Address and First Board of Directors both of which are generated for you. You must keep a signed copy of both these documents.
3. Get an Alberta NUANS report Get an Alberta NUANS Report, which typically costs $50, by using one of the designated providers.
4. Register Complete the extra-provincial registration process by registering through a registry agent or authorized Alberta Service Provider. Typically cost is $375 ($275 government fees + $100 service charge).
5. Set Up Minute Book and Resolutions. Each corporation must maintain a minute book, which holds registers, ledgers, bylaws, resolutions, articles of incorporation, etc. Every corporation must also have the board of directors and shareholders issue certain resolutions relating to topics such as bylaws, appointing officers and directors, waiving of an auditor, etc. This step can get pretty confusing and it's recommended you hire legal/accounting advisors or use a service like Ribbon to do this for you.

Alberta vs Federal Incorporation

Federal Corporations, compared to Alberta Corporations, have higher legal name protection and can move their HQ between provinces. Alberta Corporations have the benefit that they don't require Resident Canadian directors.

Step 4 - Set Up Tax Accounts

Canada Revenue Agency Business Number. A business requires a Canada Revenue Agency Business Number if it is a corporation or if it needs a CRA Account (GST/HST, Payroll Deductions, Import/Export)

Integration with Canada Revenue Agency

Every Federal and Alberta Corporation is automatically signed up for the Canada Revenue Agency (CRA) Business Number (BN). Each corporation in Alberta must file both a Federal and Provincial income tax return.

Goods and Service Tax (GST/HST) Account. If a business has sales of greater than $30,000 within the past 12 months it must register for a GST/HST account with the Canada Revenue Agency. Businesses that don't meet this mandatory threshold may still optionally register for the GST/HST account.

Payroll Account. If you have employees, and you hire them as employees not as contractors, you must register for a Payroll Account with the Canada Revenue Agency. Certain mandatory deductions such as Canada Pension Plan, Employment Insurance and Income Tax Deductions are remitted through the Payroll Account.

Step 5 - Obtain Licences and Permits

Signing up for business permits and licenses is of paramount importance as it ensures legal compliance and legitimacy for your business operations. These permits and licenses are not only a legal requirement but also serve as a crucial safeguard, helping you avoid fines, legal troubles, and potential disruptions to your business activities. Moreover, they can enhance your business's credibility and trustworthiness in the eyes of customers and partners, ultimately contributing to your long-term success and sustainability in the marketplace.

In general Alberta is business friendly, if you are ever uncertain of requirements you can call up a local government entity (city, township, etc.) and speak with a representative to clarify requirements for you to obtain the correct permit or licence.

tip

BizPal is a great resource to find permits and licences

Step 6 - Stay Compliant - Annual and Ongoing Obligations of Alberta Businesses

Sole Proprietorship Obligations

A sole proprietor must file a T1 Tax Return (Individual Tax Return) if the business:

• has to pay tax for the year;
• disposed of a capital property or had a taxable capital gain in the year;
• has to make Canada Pension Plan/Quebec Pension Plan (CPP/QPP) payments on self-employed earnings or pensionable earnings for the year;
• wants to access employment insurance (EI) special benefits for self-employed persons; or
• received a demand from the Canada Revenue Agency to file a return.

Reference - Canada Revenue Agency

The remainder of the sole proprietorship obligations depends on what tax accounts, permits and licences they have signed up for.

Corporation Obligations

Corporate obligations are more demanding than the sole proprietors

Key annual and ongoing obligations

• File an annual return with the relevant business registry
• File T2 return with the Canada Revenue Agency and Alberta tax authorities
• File relevant returns for Canada Revenue Agency Program Accounts (GST/HST, Payroll, Import/Export, etc.)
• Maintain a minute book
• Complete mandatory director and shareholder duties
• File relevant returns or file renewals for permits and licenses as applicable

Ribbon Makes Business Easy

To keep a corporation compliant is challenging. Ribbon gives entrepreneurs the tools to help them stay compliant. From setting up minute books, to taxes, payroll and accounting, Ribbon let's Entrepreneurs focus on their business. Learn more about Ribbon or email support@getribbon.ai.

Summary

In summary, establishing a business in Alberta is a methodical endeavor, as outlined in this guide. Whether opting for a sole proprietorship or embarking on the incorporation journey, these six fundamental steps furnish you with the necessary knowledge and insights to navigate the intricacies of launching and operating a business within this vibrant province. By meticulously following these steps and remaining up-to-date with your obligations, you can lay a solid foundation for your enterprise, paving the path for its prosperity in Alberta.